Convoy fraud: Roy Cho could face seven years in jail after case is referred to District Court

Roy Cho Kwai-chee, the alleged mastermind in the fraud involving independent Hong Kong financial advisory firm Convoy Global holdings, could face longer jail time along with two associates, after a magistrate on Wednesday referred the case to the District Court, a higher court that can impose jail sentences of up to seven years.

A pretrial hearing is scheduled for September 2 to arrange the transfer.

Cho, 55, a former executive director at Convoy, was charged by the Independent Commission Against Corruption in May. On Monday, it levied the same charges against his associates, Christie Chan Lai-yee, 46, a former chief financial officer at Convoy, and Byron Tan Ye-kai, 51, a former executive director at the company.

An ICAC representative appearing before Principal Magistrate Peter Law Tak-chuen at the Eastern Magistrates’ Courts on Wednesday said the three accused colluded to have Convoy spend HK$89 million (US$11.39 million) on the acquisition of True Surplus International, an investment company, in September 2016.

With the help of his associates, Cho was able to hide the fact that he was a substantial shareholder in Convoy at the time. He was also able to hide the fact that he had a 55 per cent shareholding in True Surplus. The stock exchange was also not aware of the fact that Cho received HK$57 million from the deal, according to the ICAC.Convoy is the largest independent financial adviser in Hong Kong with more than 100,000 customers.

Christie Chan has also been charged separately by the commission with another conspiracy to defraud the stock exchange and Convoy between June 2014 and December 2017, in relation to a bond offering by the company.

Chan, together with former chief executive Mark Mak Kwong-yiu, 44, and former manager Wong Shuk-on, 40, arranged for Convoy to pay HK$49.6 million in commission fees to Gransing Securities for the bond offering.

ICAC lays charges against five more people in Convoy case

Gransing, however, transferred the funds to Convoy Investment Services, which has no relationship with Convoy Global but is a private company owned by Mak and other two executive directors of the listed company, who were not identified by the ICAC.

Lee Yick-ming, 48, Gransing’s general manager, has also been charged. The four accused will return to the Eastern Magistrates’ Courts on August 23. This case will also be transferred to the District Court.

All six accused, who were released on bail, declined to comment on the matter.

The judge allowed Cho to extend his bail from May for HK$700,000. He is not allowed to travel. Chan’s bail was set at HK$20,000 for the two charges, while the rest were bailed for HK$10,000 each. They cannot contact any witnesses in the case.

Trading in Convoy’s shares has been halted, and its management has changed after the investigation by the ICAC and Securities and Futures Commission went public in December 2017. The company had filed a number of civil writs against Cho and the others, including a suite seeking HK$715 million in compensation.